Whether you’ve been running a business for years or just started a startup, you may have thought about getting a business credit card. Business credit cards are a great way to give your employees access to funds when they need them.
around it 67% of companies are already enjoying the benefits of business credit cards, and their numbers are growing with more favorable terms that credit card companies can offer. capital on tap Fastest growing business credit provider, providing access to capital for small businesses.
Business credit cards are more than just flexible access to credit. Credit cards also offer opportunities to enhance your credit rating, rewards, payment protection, and more.
This article explains the top reasons why you should provide your employees with a business credit card.
What is a business credit card?
A business credit card is a very valuable tool for almost any business. Business credit cards are similar to personal credit cards because they allow users access to credit up to an agreed limit. Business credit cards offer higher interest rates than personal credit cards, but they also offer other benefits.
Why have a business credit card
Business credit cards can be very helpful in ensuring that you and your employees have access to funds when you need them. important when is useful. Here are the top five employee credit card benefits:
1. Separate business and personal expenses
Having a credit card for business purposes is a great way to segregate various expenses and cost centers. You can easily compare and record how much money you spend on work-related items. It’s also convenient because you don’t have to reimburse your employees for the expenses they spend on their work. This saves time and eliminates the need for extra paperwork.
2. Cash flow tracking
With a credit card, you can have all your receipts and expense information in one place. This makes it easy to keep track of what is being spent and what it is being spent on. Having all this information in one place makes it much more convenient to monitor your household budget and keep an eye on changes in your spending. This means you can easily see if your spending has suddenly increased.
“It’s important to keep track of where your money is going, especially if you use multiple credit cards. This makes it easy to see where we can cut back or need to allocate more budget.”
– Damian Brychcy, COO and US MD, Capital On Tap
3. Build business credibility
Businesses, as individuals do, credit evaluationYour company’s credit rating indicates how well your company is paying off its debt. Raising a company’s credit rating makes lenders more likely to offer more lines of credit at lower interest rates or lower fees. Having employees use your credit card and paying off balances quickly will improve your company’s credit score. This is very important. Nearly half of consumers feel their credit scores are too low and do not reflect their borrowing habits..
4. Benefits such as cashback
There are various perks offered by credit card companies to attract and retain customers. Cashback, airline miles, and various loyalty point rewards can benefit your business as a result of your company getting something for every purchase. If you already need to spend that money on items for your business, it’s worth getting the extra benefits possible.
5. Purchase Protection
Credit cards often give you something better payment protection Compared to other payment types this is useful if for example you need to book a flight to visit a potential client but your flight is canceled. You can protect your business from financial damage in the event of an incident.
Additional Benefits of Corporate Credit Cards for Employees
There are other reasons to give your employees a business credit card. For example:
- You can find better interest rates and deals than some business loans
- Some cards can automatically categorize payments so you can see where your company’s money is being spent
- Business credit cards are easier to get than business loans
- Could be a flexible payment option accepted almost anywhere
- Often there are easy options to limit employee spending if needed
- For employees, it is more convenient than carrying cash.
How can I ensure my employees can use credit cards properly?
This is not an uncommon problem when employees are concerned about how they use their company’s credit cards. However, you can easily set rules with your employees as to when the card can and cannot be used. Some business his credit cards can also have limits on the amount that can be spent in a single transaction. This makes it easy to prevent accidental large spending.
Is it difficult to get a corporate credit card?
No, it’s not difficult to get a business credit card. In fact, sometimes it’s easier to get a credit card than a business loan. However, some credit card companies may have criteria that must be considered before accepting a credit card application. For example, you may need a certain period of trading history, or you may need to meet a minimum monthly earnings amount.
Is it better to give employees credit or debit cards?
A typical approach for companies is to provide credit cards for work-based expenses that employees need to cover. This is because credit cards generally offer better payment protection than debit cards. Credit cards are also more likely to offer perks such as cashback, airline miles, and points.
“Debit cards, refunds, or petty cash are no longer the go-to for business expenses. Credit cards allow businesses to spread spending and gain capital that bank loans may not provide.” Combined with security, credit cards are an invaluable tool for businesses and employees.”
– David Luck, co-founder and CEO of Capital on Tap
Business Credit Cards for Employees: Summary
If you run a business, providing credit cards that your employees can use can be very helpful. Credit cards let you keep all your business payments in one place, making it easier to track expenses. You can also benefit from payment protection and rewards with a business credit card. Additionally, you can use the card to start building your company’s credit rating, making you eligible for future loans and lines of credit on attractive terms.
